Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry
The toy industry faces relentless change and an unpredictable buying public, which creates immense challenges in anticipating best sellers and predicting volume. Like the high-technology industry, toys also suffer from many supply chain ailments, including short product life, rapid product turnover, and seasonal demand. Coupled with long supply lines and ongoing political and economic turmoil in Asia, toy makers face an unusually complex set of risks. Managers in many businesses can learn valuable lessons in managing uncertainty from toy makers. This article describes supply chain lessons focused on reducing risk by actively managing both demand and supply variability. These lessons include product variety strategies based on product extensions, rolling mix strategies, leveraged licensing agreements, coordinated outsourcing strategies, and hedging against political and currency risk by producing in many different countries.
Swot Analysis of "Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry" written by M. Eric Johnson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Toy Lessons facing as an external strategic factors. Some of the topics covered in Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry case study are - Strategic Management Strategies, Marketing, Risk management and Technology & Operations.
Some of the macro environment factors that can be used to understand the Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry casestudy better are - – digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, increasing energy prices, increasing household debt because of falling income levels,
increasing government debt because of Covid-19 spendings, geopolitical disruptions, etc
Introduction to SWOT Analysis of Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Toy Lessons, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Toy Lessons operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry can be done for the following purposes –
1. Strategic planning using facts provided in Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry case study
2. Improving business portfolio management of Toy Lessons
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Toy Lessons
Strengths Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Toy Lessons in Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry Harvard Business Review case study are -
Ability to recruit top talent
– Toy Lessons is one of the leading recruiters in the industry. Managers in the Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Toy Lessons is one of the most innovative firm in sector. Manager in Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Toy Lessons in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Toy Lessons digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Toy Lessons has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Low bargaining power of suppliers
– Suppliers of Toy Lessons in the sector have low bargaining power. Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Toy Lessons to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Technology & Operations industry
– Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry firm has clearly differentiated products in the market place. This has enabled Toy Lessons to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Toy Lessons to invest into research and development (R&D) and innovation.
Analytics focus
– Toy Lessons is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by M. Eric Johnson can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Ability to lead change in Technology & Operations field
– Toy Lessons is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Toy Lessons in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Strong track record of project management
– Toy Lessons is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Toy Lessons has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Toy Lessons has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Toy Lessons to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry are -
Low market penetration in new markets
– Outside its home market of Toy Lessons, firm in the HBR case study Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Toy Lessons has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Toy Lessons has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Toy Lessons even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Interest costs
– Compare to the competition, Toy Lessons has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Toy Lessons is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Toy Lessons has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Lack of clear differentiation of Toy Lessons products
– To increase the profitability and margins on the products, Toy Lessons needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Toy Lessons has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Aligning sales with marketing
– It come across in the case study Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry can leverage the sales team experience to cultivate customer relationships as Toy Lessons is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Toy Lessons 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry, is just above the industry average. Toy Lessons needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Opportunities Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry are -
Creating value in data economy
– The success of analytics program of Toy Lessons has opened avenues for new revenue streams for the organization in the industry. This can help Toy Lessons to build a more holistic ecosystem as suggested in the Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry case study. Toy Lessons can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Toy Lessons can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Toy Lessons can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Toy Lessons in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Toy Lessons can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Learning at scale
– Online learning technologies has now opened space for Toy Lessons to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Using analytics as competitive advantage
– Toy Lessons has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Toy Lessons to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Toy Lessons can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Toy Lessons can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Toy Lessons can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Toy Lessons can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Technology & Operations segment.
Buying journey improvements
– Toy Lessons can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Toy Lessons can use these opportunities to build new business models that can help the communities that Toy Lessons operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Developing new processes and practices
– Toy Lessons can develop new processes and procedures in Technology & Operations industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Threats Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry are -
Consumer confidence and its impact on Toy Lessons demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Toy Lessons in the Technology & Operations sector and impact the bottomline of the organization.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Toy Lessons business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry, Toy Lessons may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Toy Lessons needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Toy Lessons with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Toy Lessons.
Technology acceleration in Forth Industrial Revolution
– Toy Lessons has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Toy Lessons needs to keep up with the evolution of technology in the Technology & Operations sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Toy Lessons in the Technology & Operations industry. The Technology & Operations industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Stagnating economy with rate increase
– Toy Lessons can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Toy Lessons can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry .
Environmental challenges
– Toy Lessons needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Toy Lessons can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Weighted SWOT Analysis of Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Learning From Toys: Lessons in Managing Supply Chain Risk From the Toy Industry is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Toy Lessons needs to make to build a sustainable competitive advantage.